On Limiting 2 am Bars in the Historic District

Statement of past Ward One president Gilbert Renaut regarding proliferation of restaurants licensed to serve alcohol until two o’clock in the morning.

There are places in the United States where there is no zoning law, and a landowner can put his land to any use he pleases, unless it is illegal for some other reason. Annapolis is not one of those places, and nor is anywhere else in the State of Maryland. In Annapolis, the City has a Department of Planning and Zoning charged with comprehensive land use planning and staffed by people with college and university training in city planning and related academic disciplines.

The Ward One Sector Study was undertaken by the department to achieve consensus over a sensible planning policy for Ward One, articulate a master plan reflecting that policy, and start the work toward implementing it. The study’s participants included the planning professionals employed by the City, a consultant under contract with the City, residents, and businessmen, including non-residents with no voting rights in the City. Four of the businessmen represented the hospitality industry. The study group held countless meetings and hearings for about three years to reach its conclusions.

Recognizing the link between the health of the neighborhoods and the commercial areas, the study agreed that Annapolis must remain “livable” and needed “special protections for the most vulnerable neighborhoods.” The study further identified several disturbing trends in the ward, of which declining population (down about 20% from 1970 to 1990, an average of 1% per year), particularly single-family residential population, was at the head of the list. Another trend identified was a steady decrease of local serving businesses and an increase in establishments serving alcohol.

Today there are approximately 5600 alcohol-serving customer seats in Ward One (in contrast to 3700 residents), of which about 15% have been added since 1980 (again, up an average of about 1% per year). Based on increasing complaints from our residents, the Association advocated rolling back all closings to midnight. As the then president of the association, John Prehn, explained in a letter to the Mayor and City Council in 1990, the primary problems were noise, fighting, loitering, cruising, littering, parking violations, public urination, and speeding through residential streets, particularly at closing time. Observing tavern activity over time, we concluded that the two o’clock licenses were disproportionately burdensome not only to the peace of the residential neighborhoods, but also to costly city services: police were called to break up fights, and ambulances were summoned to take injured patrons to the hospital. Late night patrons waiting in line were relatively young, under thirty-five, and were there to drink and party, not eat; in effect, the two o’clock licenses marked the difference between a restaurant and a night club. The sign aimed at Route 50 for the satellite Buddy’s on Hudson Street said it all with admirable candor: Buddy’s Late Night.

In the current regrettable climate of personal attacks, it is noteworthy that Captain Prehn’s letter also pointed out the difficulty of reaching the position we did, because the proprietors of the late-night establishments are reputable citizens, who “run fine restaurants which help to make Annapolis the wonderful community it is,” and have made sincere and energetic efforts to help with the problems we identified. Unfortunately, despite those efforts, downtown Annapolis was more and more being seen by young people from the greater metropolitan area surrounding us as a party town, a place to go and drink until two o’clock in the morning. Five years later, it has not gotten any better, and for a vision of a possible future as a regional watering hole, talk to residents of Georgetown in Washington or Fells Point in Baltimore. The Baltimore Sun of September 10th gives a very vivid description of how bad it has become in Fells Point.

Understandably, representatives of the hospitality industry objected very strenuously to rolling back existing licenses, and it became an intensely-debated issue in the Sector Study deliberations. Ultimately the Association and other Sector Study participants agreed on a fairly obvious compromise: the City would not take away any late licenses already in effect, but it would forbid any new ones. While this approach was unlikely to make downtown conditions any better, it was hoped it would keep them from getting any worse. And most importantly for present purposes, it was plainly the least disruptive compromise available. Simply, it recognizes the enormous difference in expectation interests between taking away something you already have and depend on (one of the hospitality spokesmen estimated 30% of his trade was dependent on the late license), as against merely eliminating the possibility of getting something you do not already have and cannot possibly be depending on.

In July of 1993, the City Council passed a resolution adopting the Sector Study as City planning policy. The same day, inexplicably, it approved a new two o’clock conditional use, Buddy’s, it had disapproved three years earlier before the Sector Study was completed. This was the first violation of the compromise — by the City. It was this latter approval that the Association challenged in court, arguing that it was illegal for the Council to change its mind on a conditional use application “without a substantial change in conditions,” particularly when it had just adopted as official City policy a comprehensive plan specifically forbidding new two o’clock licenses.

Minutes of a meeting of the Economic Matters Committee in September, 1993, reflect the views of the hospitality industry expressed by the proprietor of Middleton’s, Jerry Hardesty (who now operates O’Brien’s as well and whose current intentions there, according to an article in the business section of the Capital, are frustrated by having a two o’clock license only for the first floor). According to the summary of his testimony, they would “stand by” the compromise so long as restaurants’ and bars’ existing two o’clock licenses would be valid “in perpetuity,” and “transferable” in a sale. A further condition of industry support was that the seating caps would be removed in favor of more liberal square-footage public safety guidelines. Finally, he indicated that the industry preference was for the agreement to be “codified” into a City ordinance. An October memorandum from the Sector Study consultant listed the existing two o’clock licenses, so there could be no misunderstanding.

Before codification was accomplished, however, another establishment which did not have a two o’clock license, Maria’s, presented a variation on the reasonable expectation interest argument: its application for such a license was already to some degree pending, and its proprietor had a reasonable expectation of being at least allowed to complete the process. We did not think that this was a good argument — indeed it violated the compromise — again. Nevertheless, the City Council accepted it, and the ordinance adopted in June, 1994, to codify the compromise also permitted this establishment to continue to pursue approval of the “conditional use” and liquor license needed for two o’clock closing.

There has been a lot of confused talk about the “conditional use” process, and a brief explanation might be helpful. What zoning law is all about is regulating land use, and some “uses” are recognized as more “intense” than others, having the largest potential for disruption. In Annapolis, the more intense uses, such as bars and restaurants, are not currently permitted automatically in the historic district or near residential areas, but must be approved as conditional uses, with operating conditions imposed, on a case-by-case basis, based on each applicant’s unique circumstances. There is no explicit law forbidding, say, ecdysiastic lap-dancing establishments, but one presumes that none would survive conditional use review. By their nature, such case-by-case determinations are sometimes a difficult balancing act — it is not the same as adding a column of figures, where disagreement means someone simply goofed.

As it happened, Maria’s application was rejected on its merits by the Council. Statutory standards for approval of such uses require, for example, a finding that the use will not be “injurious to the use and enjoyment of other property * * * or substantially diminish and impair property values within the neighborhood” and that a “community need for the use has been established.”

In June of 1995, the Court of Special Appeals of Maryland held in our favor against Buddy’s, ruling that the Council’s action in approving Buddy’s second application was “arbitrary and capricious,” and hence unlawful. Immediately thereafter, O-34-95 and 0-35-95 were introduced.

With the exception of Alderman Tullier, whom I do not know, I have enjoyed some sort of personal dealings with every member of the Council as well as with the Mayor, and I am sincere when I say that one-on-one they seem to be honorable people doing what they think is best for the City, and that I have nothing but warm personal regard for each of them. Nevertheless, it is hard for downtown residents to see these two bills as anything but collective revenge against us for the courthouse victory.

The two bills would not simply undo the part of the compromise favoring residents, although 0-35-95 does just that. The more far-reaching, O-34-95, would then eliminate not only the midnight liquor limit downtown, but also the entire conditional use process for “any restaurant” there permitted to “remain open” until midnight on June 13, 1994. Thus, not only would the twelve existing establishments with midnight liquor licenses be automatically permitted both to extend their hours until two o’clock and to “expand * * * to include a bar, dancing and live entertainment,” but six other restaurants permitted to stay open until midnight, but currently without any liquor license, could apparently do the same thing. And lest we forget the thirteen existing restaurants with two o’clock licenses, they too benefit, since they could fully “intensify” their “use” to that of a night club without any of the conditional use protections now required. Additionally, the City Code currently allows expansion into an adjacent building subject to the conditional use process, but eliminating the process for restaurants and bars would apparently make City approval of that expansion automatic as well, not to mention expansion onto the sidewalk and, if the recent Capital editorial carries the day, onto the rooftops.

Penetrating the confusion and personal animosity which have regrettably characterized most of the debate on this issue, these bills are said to rest on “fairness.” As one restaurant owner who does not have a two o’clock license put it to me, where was the fairness in letting the four Sector Study industry representatives, all of whom already had two o’clock licenses, cut a deal which “codified” their monopoly “in perpetuity.” While I admit that this point has some appeal, the proposed cure will not withstand analysis. As I said, the key to the current compromise was protection of reasonable expectation interests: the expectation that the City would not take away a license on which your livelihood depended was much more reasonable than any expectation that the City would start handing out such licenses to anybody who asked. There has not been a new two o’clock license lawfully granted since 1985 (Pete’s Place) — even before the Sector Study there had been a moratorium in fact if not quite in law. And viewed from that perspective it is hard to see any “fairness” difference between those who already have restaurants and those who only aspire to them — neither had any reasonable expectation of obtaining a late license.

I have heard aldermen from other wards remark that the historic district is the jewel in the City’s crown and that it belongs to all the City’s residents, and I quite agree. This bill will apparently be considered at public hearings at City Hall by the City Council on Monday, March 22d. If you believe in the regional watering hole vision of the historic district, Georgetown East or Fells Point South — as a Main Street T-shirt already has it, “a drinking town with a sailing problem” — then other aldermen have the power of the majority to do it to us. If, as I suspect, it is not your vision of the City’s jewel any more than it is mine, then please let the aldermen from the other wards know.